Customer data is everywhere. Keeping it organized can be a mammoth task and using it can be even more challenging. But there’s one tool that can simplify both tasks: a CRM (customer relationship management) database.
This article will describe what makes a good CRM database and how it can help you make the most out of customer data.
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What is a CRM database?
A CRM database is a resource businesses use to keep track of vital information about their customers. It is used to collect, govern, transform and distribute this information across the organization.
Every interaction the business has with its customers is collected in one place, with this information being available to customer support agents, sales teams, marketing teams and anyone else who may require it to perform their role more efficiently and effectively.
There are three main types of CRM databases:
1. Open-source CRM system
Open-source CRM systems are pieces of software that can be downloaded. It allows each company to build and customize the CRM database for their specific uses.
Because open-source CRM systems are managed and maintained in-house, companies often rely on a dedicated IT team to build and manage their database. They will also be responsible for managing their data security processes to keep the information safe.
2. On-premises CRM system
On-premises CRM systems are also stored and run from a company’s servers but are often more feature-rich. It gives companies access to a broader range of options for utilizing the data.
They will also require dedicated tech teams to set up and maintain and often involve a higher initial cost, as the software generally retails for a much higher price than open-source alternatives.
3. Cloud-based CRM system
A cloud-based CRM system is offered in a SaaS (software as a service) model. This means that a service provider is responsible for running the system, so a business does not need to worry about setting up or maintaining its CRM database or being responsible for its security.
A business utilizing a cloud-based CRM simply logs into it from anywhere that has an internet connection, making it a popular choice for large companies operating in several locations or territories, or for those that employ a large remote workforce.
Features of a good CRM database
Several key components make a good CRM database. Some of the most requested by prospective purchasers include contact management, interaction tracking and scheduling features.
Here are some of the most helpful features of CRM databases that businesses can use to great effect.
1. Lead management
CRM databases make it easy to keep details of leads. Because details are stored in a centralized place, the progress with leads can easily be seen by any team members who are working with them.
Many CRM systems will feature task automation that further simplifies the sales processes. Order processing, order tracking and contact management features make it easier to focus on the customer rather than administrative tasks.
2. Customer service
Customer service teams can utilize CRM databases to great effect. A CRM database offers a centralized platform to collect all the vital data collected on customers, from their personal information to their order history. This means that should they contact customer support, agents have access to everything they need to help them in one place.
3. Marketing automation
A good CRM database can also help with marketing automation. Customers can be divided into categories based on various criteria, such as age, sex or purchasing preferences.
This makes it easier to carry out targeted marketing campaigns. Integration with other tools, such as communication platforms or email monitoring software, makes running these campaigns much more efficient.
4. Reporting and analytics
The best CRM platforms will feature reporting and analytics, allowing businesses to conclude from their data following their KPIs. Examples of this may include monitoring support ticket resolution times, examining average order values, or analyzing customer churn rates.
What are the benefits of using a CRM database?
There are numerous benefits to using a CRM database. In a survey conducted by Capterra, they found that customer retention, customer satisfaction and sales revenue were all positively affected by the use of a CRM in many cases.
Here are a few more ways that using a CRM database can help your business.
1. Centralized database
One of the main benefits of using a CRM database is that it collects data together in one place. Anybody who needs to access information about a customer doesn’t need to log in and out of several different apps to gather everything they need.
With a CRM database, all the customer’s data information is stored together in one place, so there’s no need for the agent to waste time gathering it themselves. They already have everything they need at the beginning of their interaction.
2. Organized and detailed customer information
A CRM platform is a powerful tool that stores detailed information about how customers interact with your brand. Information about when they visited your website, which products they browsed in your e-commerce store, and even how long they spent looking at individual pages can all be stored.
This information can be analyzed for targeted marketing campaigns, customer support or other reasons. Agents can even leave notes about customers that can be referred back to by other agents in the future.
How to use a CRM database to unlock customer interaction
One of the most powerful advantages of using a CRM database is that it can revolutionize how you interact with your customers. Here are a few ways a CRM database can unlock better customer interaction for your business and help you boost sales.
1. Personalization
No two customers are the same. From how they interact with your website to their purchasing habits, customers are constantly telling you about themselves in subtle ways, information that can be used to great effect with the help of a CRM database.
Customers are more than willing to share their information if it means their experience will be more personalized. In exchange for personalized offers or discounts, 63% said they were happy to share personal data.
Personalization can be anything from an email with targeted offers tailored specifically for that customer to simply addressing your customer by their name should they reach out for support. Personalization can help benefit your organization in whatever form it takes. In a survey of its customers, Infosys found that 86% of customers said personalization impacted what they purchased.
2. Identifying top customers
Not all customers provide your business with equal profits. A CRM database can provide the analytical tools to identify your top customers, allowing you to prioritize your interactions with them and maximizing your sales.
Data regarding how much a customer spends on average and how much of your time they take up with interactions can help you identify which customers spend the most money with the smallest investment of time.
3. Close more deals
Analyzing data from your CRM database can give you insights into which marketing and sales tactics yield the best results. You can categorize different customers by the approaches taken with them and compare this data against the revenue made from sales by the categories of customers.
This will show you which sales tactics and marketing methods have led to the most sales or customer retention. You will then know to utilize these methods more with future leads.
4. Upselling opportunities
By analyzing the customer data stored in your CRM database, either with its analytical tools or through others such as databricks pandas dataframe, you can identify what a customer is likely to buy based on their purchase history and individual requirements. It allows you to carefully select which products you offer them, increasing the likelihood of making a successful sale.
For example, if you see from your CRM data that a customer bought an iPhone two months ago, you could contact them with information about cases, screen protectors and other accessories for the specific model of phone they purchased.
Not only that, but you know that in a year a newer model of iPhone is released, that customer is more likely to be interested in purchasing it based on their history with the brand so that you can advertise to them accordingly.
5. Increase customer retention
Customer retention is key to achieving sales targets, as customer retention is a bigger driver of sales than acquiring new customers for most businesses.
Using the data from your CRM database can provide valuable insights into what persuades your customers to make repeat purchases, but also into what causes your customers to stop buying from you.
By comparing the data of customers who continue to shop with you and those who have lapsed, you can begin to understand which aspects of your sales pipeline are working and abandon those that aren’t. This should help you reduce customer churn in the future.
The takeaway
CRM databases are powerful tools that help you collect, organize and analyze customer data. They can help your customer support teams provide better customer service by collecting relevant information in one place.
These tools can help your marketing teams by providing analysis of customer spending habits and making it easier to conduct personalized marketing. And they can help your sales teams by providing better upselling opportunities and improving customer retention.
This article is part of the Crunchbase Community Contributor Series. The author is an expert in their field and we are honored to feature and promote their contribution on the Crunchbase blog.
Please note that the author is not employed by Crunchbase and the opinions expressed in this article do not necessarily reflect official views or opinions of Crunchbase, Inc.
